SBI’s additional capital requirement has been increased from 60 bps to 80 bps. At the same time, the additional capital requirement of HDFC Bank has been increased from 20 bps to 40 bps.
The Central Reserve Bank RBI has shifted SBI and HDFC Bank to the upper bucket in the list of Domestic Systemically Important Banks (D-SIBs). Where SBI has been shifted from Bucket 3 to Bucket 4. At the same time, HDFC Bank has been shifted from Bucket 1 to Bucket 2. Due to the upward shift in the bucket, both banks will have to hold more Tier 1 capital. These banks will have to maintain more than Tier 1 capital by April 1, 2025.
After this change, the additional capital requirement of SBI has been increased from 60 bps to 80 bps. At the same time, the additional capital requirement of HDFC Bank has been increased from 20 bps to 40 bps.
In its latest Financial Stability Report, RBI had mentioned about the impact of problems of one bank on another bank. In the report, RBI had said that if any critical bank fails, there will be an impact of 3.6% on Tier 1 capital. Earlier the impact was estimated at 2.2%. The NPA of all commercial banks is expected to reduce from 3.2% to 3.1% by September 2024. CRAR is expected to be 14.8% till September. Stress cases are estimated to be 12.2%. Even in the stress case, GNPA is estimated to be 4.4%.
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